If you’re a manager or you're in HR or both, you probably don’t have time to read an article warning against end-of-the-year performance reviews. You’re too busy doing them. So here’s a suggestion. Read this, mull it over, and add it to next year's to-don't list. That way you may be one of the lucky people who gets to say, I told you so.
Simply put, performance reviews do not work anymore. Here are five key reasons to give them the boot next year.
1. They’re Not Written In Stone
We still tend to look at performance reviews as part of the necessary scaffolding that supports HR. But being debated is part of their history. They were first used by the U.S. Army in WWI to weed out the chaff; they helped target high achievers as well in WWII. Adapted to fit the postwar workplace, the appraisal system was already part of work culture for many veterans.
By the 1960s it was clear we ought to measure growth as well as accountability. As organizations began flattening out, managers found themselves overburdened, and some companies decided it wasn’t worth the hassle. The first big firm to drop them was Kelly Services, back in 2011, then came Adobe, and so on. In work years, 2011 is a small eon ago. We’re overdue for a change.
2. They Don’t Fairly Measure Performance
We still haven’t mastered that balance between employee growth and accountability. It’s harder to rate development than it is responsibility. But another big X-factor lies with managers themselves.
Even when managers agree on the specific criteria to be measured and all are judging the same factors, there’s an alarming lack of consistency. We may all agree on what’s important, but in terms of what criteria carries more weight, we’re all different, as recent research by the London School of Economics and Political Science showed. Even more striking: we don’t know how different we all are.
3. Goals Move, As Do Business Cycles
As companies retool strategically to meet a constant cycle of market disruptions, we’re no longer benchmarking based on fixed points. Products are rolled out fast and it’s onto the next. But a key facet of some “evolved” performance reviews includes a mutual goal-setting agreement between manager and employee. Theoretically, it’s all good: both sides have tangibles to keep an eye on.
Here’s the sticky part: in order to have attainable goals, these goals need to be fixed — either in terms of time or in terms of task, or both. Yet both manager and employee may find themselves check-marking not applicable as they go down the list. To track growth, we track the length of time (among other criteria) it takes an employee to (for instance) improve, get faster, get more effective — and that has to be measured against similar goals over time. Except most firms don’t have the luxury of maintaining that kind of consistency.
4. The End Of The Year Is A Really, Really, Really Bad Time To Do Them
Managers are merely the messengers here, not judge and jury. But we know that regular and constructive feedback drives employee engagement, and engagement drives a company’s success. When criteria is embedded and seamed into a workplace culture, it’s far better received.
But waiting until December to talk about something that happened in March may feel like a sucker punch to an employee. It’s certainly not going to drive growth, or build trust between employee and immediate supervisor — which 53% of employees in a recent SHRM survey said was very important in terms of their job satisfaction. Calling on an employee to resolve to improve in one area last touched on months ago may instead inspire an entirely different resolution — to find another job in the New Year. Really, we know how this story ends.
5. They May Be Obsolete Anyway
Performance reviews — faulty, arbitrary, at times even mystifying — nevertheless drive promotions and drive compensation. That’s the uncomfortable reality we’re still facing. Another reality: work is changing anyway. Caught in the whirlwind of end-of-year business, we tend to lose sight of all of the meaningful revelations the world of work unearths over the year, including trends that are just around the corner.
But this has been a particularly compelling 12 months. Whether or not we’re wedded to old systems, tech may simple overcome us regardless. We'll be finding more ways to employ daily analytics and more opportunities to recognize and reward employees by task and meeting, not quarter or year. The review itself may seem extraneous very soon.
It’s an entirely valid point that many companies still need performance reviews, and that to simply do away with them would topple the whole way organizations manage their employees. But here's the problem with that argument: it means we are still basing a presumably better future on a flawed status quo. So perhaps instead of arguing against throwing out the baby with the bathwater, just opt for a whole new bathroom instead.
